In July, just 29 out of the largest 150 U.S. metropolitan areas witnessed a year-over-year rise in homes with price reductions. Nationally, just 15.5% of homes listed on Realtor.com had price cuts, a decline from 19.1% the previous year. But in some metros, particularly in the South and Midwest, sellers are slashing prices as inventory rises.
Over the past year, Huntsville, Ala., saw a 69.6% increase in home price reductions, which, in large part, have come from builders adding fresh inventory to the local market. Similarly, in Lafayette, La., price reductions have risen 69.2% year-over-year, sending the median list price 9.4% lower over the same period, Realtor.com reports.
“Generally, there are two things that can drive an increase in price reductions,” says Realtor.com Chief Economist Danielle Hale. “One is if you have more homes on the market. Two is if there is a mismatch between what sellers are expecting and what buyers are willing and able to afford.”
“What we’re seeing in the housing market is a reversal of what we saw in the [COVID-19] pandemic,” says Hale. “Areas that attracted a lot of remote workers and saw prices skyrocket are seeing trends slow.”